Forrester Customer Service Wave q42008

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<p>October 21, 2008</p> <p>The Forrester Wave: Customer Service Software Solutions, Q4 2008by Natalie L. Petouhoff, Ph.D. for Business Process &amp; Applications Professionals</p> <p>Making Leaders Successful Every Day</p> <p>For Business Process &amp; Applications ProfessionalsIncludes a Forrester Wave October 21, 2008</p> <p>The Forrester Wave: Customer Service Software Solutions, Q4 2008Define The Customer Experience Before Choosing A vendorby Natalie L. Petouhoff, Ph.D. with William Band, Pete marston, Chip Gliedman, Sharyn Leaver, and Andrew magarie</p> <p>ExECuT i v E S u m mA ryForrester evaluated the leading customer service solution vendors across an average of approximately 180 criteria and found that the vendors still need to be grouped into three groups: interaction-, process-, and record-centric. Forrester found the Leaders in the customer-interaction-centric products to be eGain Communications, KANA Software, RightNow Technologies, Talisma, LivePerson, and KNOVA; the Leader in the business-process-centric products is Sword ciboodle; and the Leaders in the customer-record-centric products are Microsoft,, Oracle Siebel, SAP, Oracle CRM On Demand, and Entellium. Among interaction-centric products, Genesys Telecommunications Labs, InQuira, and Numara Software are Strong Performers. Pegasystems, Chordiant Software, and Consona CRM are Strong Performers within the process-centric category. And within the record-centric category, NetSuite, Oracle PeopleSoft CRM, Maximizer Software, Oracle E-Business Suite CRM, SageCRM, SugarCRM, Infor, and Sage SalesLogix are all Strong Performers. A careful review of a companys customer experience requirements must be weighed against the capabilities and individual strengths of each of the vendors solution. To provide great customer experiences, the deployment and integration of more than one vendors solution may be necessary.</p> <p>TABL E O F CO N TE NTS2 EBD Raises The Stakes Of Customer Service Vendor Selections 7 Customer Service Software Evaluation Overview 10 The Results: Customer Service Apps Legacy Footprints Still Shine Through 20 Interaction-Centric Vendor Profiles 25 Process-Centric Vendor Profiles 28 Record-Centric Vendor Profiles 35 Supplemental Material</p> <p>N OT E S &amp; rE S O u rCE SForrester conducted product evaluations in Q2 2008 and interviewed 29 vendors and user companies: Amdocs, Chordiant, Consona Crm, eGain Communications, Entellium, Frontrange Solutions, Genesys Telecommunications Laboratories, infor, inQuira, KANA Software, KNOvA, LivePerson, maximizer Software, microsoft, NetSuite, Numara Software, Oracle Crm On Demand, Oracle E-Business Suite Crm, Oracle PeopleSoft Crm, Oracle Siebel, Pegasystems, rightNow Technologies, Sage SalesLogix, SageCrm,, SAP, SugarCrm, Sword ciboodle, and Talisma.</p> <p>Related Research Documents The Forrester Wave: Enterprise Crm Suites, Q3 2008 August 29, 2008 2008, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. To purchase reprints of this document, please email</p> <p>2</p> <p>The Forrester Wave: Customer Service Software Solutions, Q4 2008For Business Process &amp; Applications Professionals</p> <p>EBD RAISES ThE STAkES OF CuSTOMER SERVICE VENDOR SELECTIONS As product and price differentiation erodes, businesses are turning to customer experience to gain market share over their competitors.1 This move toward experience-based differentiation (EBD) raises the stakes for customer service professionals to make the right technology decisions. Heres why:</p> <p> EBD strategies are critical, but often vague. Ninety-one percent of the decision makers</p> <p>surveyed by Forrester said that customer experience would be very important or critical to their business. However, half of them lacked a clear customer experience strategy.2 Without baselining the customer experience and creating a strategy and an executable plan, the customer service product selection is haphazard at best, leaving customer needs unfulfilled and brand equity destroyed.</p> <p> Implementation mishaps can squash EBD opportunities. Despite the importance that</p> <p>enterprises place on EBD strategies, they have difficultly organizing to deliver on their intentions. In fact, 60% of executives surveyed cited implementing technology as the second biggest obstacle to launching experience-based initiatives with the first obstacle cited as getting organizational alignment.3</p> <p> EBD requires a BT-centric view. Given the poor state of customer experiences, businesses</p> <p>that understand and execute on the competitive potential of technology to innovate customer experiences can easily blow away their competition. But delivering loyalty-creating, customercentric experiences, and thus better business results via technology, requires functional departments, business units, and IT to examine how they will work as a united business technology (BT) team. The BT team must select, implement, and manage customer service apps as a shared responsibility and a strategic, bottom-line competitive asset.4</p> <p>Growing Customer Demands Collide With A Shifting Marketplace To get it right, customer service professionals must place their technology bets wisely. Thats no easy task given the constant rounds of mergers and acquisitions that keep this market in constant flux (see Figure 1). Meanwhile, customer experience expectations continue to escalate, forcing potential software buyers to navigate a more complex set of business requirements, product feature sets, application delivery models, and integration choices, including:</p> <p> Foundational knowledge management (KM) tools for self-service and agents. Once</p> <p>pigeonholed as a tool for consumers to access static customer Web site support documents, advanced knowledge management and search tools are a critical necessity for satisfying selfservice and agent-customer experiences.5 Whether via an IVR or Web site, search technology can provide consumers with better self-service experiences and answers. As for agents, robust KM is the only avenue to effectively and efficiently answer the exponentially increasing range of customer inquiries about products, services, entitlements, transactions, and policies. Look for vendors offering natural-language processing and automatic query intent combined with FAQguided, structured resolution and decision tree/inquiry resolution processes.</p> <p>October 21, 2008</p> <p> 2008, Forrester research, inc. reproduction Prohibited</p> <p>The Forrester Wave: Customer Service Software Solutions, Q4 2008For Business Process &amp; Applications Professionals</p> <p>3</p> <p> Integrated customer service and eService workflows. The evolution of customer service</p> <p>management products has changed the landscape considerably. In 2005 and 2006, Forrester evaluated products in customer service management and eService as separate categories. Today, customers want integrated, seamless customer experiences. The result: Best-in-class vendors have integrated customer service and eService interaction channels and now provide common underlying workflows and business rules as well as a seamless transition between contact interaction channels.6</p> <p> Web 2.0 functionality to satisfy emerging social consumers. Social Computing is rising in</p> <p>importance, especially among the younger consumer demographics. As Gen X, Y, and beyond grow as a percentage of customers, customer service professionals must find innovative ways to engage with these emerging social consumers who expect a rich customer experience through community-based interactions. Weve begun to look at the vendor capabilities in this area, including Web 2.0 tools and applications (discussion threads, wikis, blogs, RSS, social bookmarking, social networking, widgets, mashups, and podcasting) as well as Web 2.0 technology capabilities (XML, AJAX, Flash/Flex and mashup markers, and Web services standards) in our product evaluations.7</p> <p> Increased consumer acceptance and use of chat. Companies, spending billons of dollars</p> <p>annually for their Internet presence, are starting to evaluate the merits of adding chat and other interactive functions. This is a smart move, given that consumers who use chat report that it meets a broad spectrum of needs from allowing rapid, personalized, and timely communications to direct interaction at the moment of need without having to get on the phone with a customer service agent. It can be such an effective mode of interaction that it may someday even replace email.8</p> <p> Need for fully implemented computer telephony integration (CTI). About half the cost of</p> <p>running a contact center is tied up in up in labor. CTI bridges the telephone to the computer, shortening the average length and duration of calls. This maximizes the number of talk minutes per hour, which reduces the required number of staff and offers a faster, more personalized service and voice processing input by minimizing time spent on the discovery phase of the call.9 From a customers point of view, this eliminates having to answer the long list of annoying and trivial questions, i.e., repeating information theyve just keyed into the keypad. Not all CTI is the same; look for vendors that provide and implement CTI with screen-pop to the agents desktop.</p> <p> Being proactive about making analytics come alive. Its critical for a company to receive</p> <p>customer feedback, comments, and complaints. Yet many companies dont have a mechanism to gather that feedback and analyze it, much less to integrate that information back into their products and services. Many vendors offer customer service analytic packages but dont offer an easy-to-use format. Look for companies that provide the next generation of collaborative Web 2.0 communication tools, which enable a free flow of feedback and ideas company-tocustomer, customer-to-company, and customer-to-customer making requests transparent.</p> <p> 2008, Forrester research, inc. reproduction Prohibited</p> <p>October 21, 2008</p> <p>4</p> <p>The Forrester Wave: Customer Service Software Solutions, Q4 2008For Business Process &amp; Applications Professionals</p> <p> More SaaS and hybrid delivery models to address time-to-market and cost concerns. Many</p> <p>vendors are offering a variety of on-demand deployment models: multitenancy, private hosting, and hosting of traditional on-premise solutions.10 Some also offer hybrid deployment, a SaaS solution integrated with an on-premise version, and others offer SaaS-only deployments. Theres a shift in vendor platforms from client/server to the SaaS platform. Organizations must balance time-to-market, time-to-value, upfront and ongoing costs, and integration and optimization with internal legacy systems.</p> <p>Figure 1 vendor mergers And Acquisitions Need To Be Anticipated During Any Tech Life CycleVendor Clarify ServiceWare and Kanisa PeopleSoft Knowledgebase.Net Epiphany MAPICS Siebel SSA Global Telephony@Work UniPress Software Onyx KNOVA Talisma Graham Technology45543</p> <p>Acquired by Amdocs KNOVA Oracle Talisma SSA Global Infor Global Oracle Infor Global Oracle Numara Software</p> <p>Date Late 2001 Late 2004 Early 2005 March 2005 Mid 2005 Mid 2005 Early 2006 Mid 2006 Mid 2006 August 2006</p> <p>New name Amdocs CES Customer Management KNOVA Oracle PeopleSoft CRM Talisma SSA CRM Infor CRM Oracle Siebel CRM Infor CRM Oracle CRM On Demand Numara FootPrints Consonas Onyx CRM KNOVA Talisma sword.ciboodleSource: Forrester Research, Inc.</p> <p>M2M Holdings (Consona) August 2006 Consona nGenera Sword March 2007 Early 2008 Mid 2008</p> <p>The Three Types Of Customer Service Vendors To Consider A complete customer service solution includes three key components to provide great customer experiences: 1) an interaction layer to manage all customer interaction channels and underlying knowledge management, workflow, and business rules engines; 2) a customer record repository to aggregate customer information and manage more complex contract and entitlements; and 3) business process automation to streamline common cross-departmental tasks (see Figure 2).11</p> <p>October 21, 2008</p> <p> 2008, Forrester research, inc. reproduction Prohibited</p> <p>The Forrester Wave: Customer Service Software Solutions, Q4 2008For Business Process &amp; Applications Professionals</p> <p>5</p> <p>Customer service app vendors are beginning to develop applications that deliver multichannel experiences, tap into multiple business processes, and access multiple data sources. However, most have been developed from one of these three heritages and still deliver functionality that is skewed toward one of these three components. Until vendors provide a new type of cross-component architecture, Forrester will continue to divide customer service vendors into three categories to help businesses understand the current choices, their pros and their cons. Those heritage footprints are: interaction-, record-, and process-centric customer service solutions (see Figure 3).</p> <p> Interaction-centric products. Interaction-centric applications focus on the customer</p> <p>interaction channels. These products typically have greater self-service capabilities that can serve both pre- and post-sales needs. They are typically used in high-volume, transactionoriented relationships, such as those often encountered in B2C environments, where a full CRM system may not be required or even cost-effective. They provide better customer experiences when the speed and accuracy of the interaction is of the utmost importance. They are also better at providing integrated experiences among all the various customer interaction channels (email, chat, forums, IVR, Web site, and agent interactions).</p> <p> Process-centric products. Process-centric applications focus on delivering repeatable processes</p> <p>efficiently. Business-process-centric platforms allow the deployment and management of applications that automate decisions using rules-based processing algorithms and tools. Their value lies in the workflow engines and automation. The result is speedier and more flexible decision-making and information processing and compliance with corporate policies. For instance, some vertical markets such as finance, insurance, healthcare, media, and utilities, have common processes executed repeatedly. Automating these processes, through, for example, transactions on a self-service portal, provides great efficiencies and increases customer satisfaction. While the business-process-centric software may require information from external systems and an underlying customer r...</p>


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